Woolworths lifts supermarket sales in NZ by 2.9pc

Woolworths, which has about 40 per cent of New Zealand's supermarket sales, lifted revenue by 2.9 per cent at its Countdown-brand stores in the third quarter of the current financial year and claimed an increase in market share and customers.

Australia's largest retailer said New Zealand supermarket sales rose to $1.397 billion in the 13 weeks ended April 1 from $1.358 billion in the same period a year earlier. In Australian dollar terms, revenue rose 6.1 per cent.

Sydney-based Woolworths has rebranded all its New Zealand supermarkets as Countdown, phasing out the Woolworths brand as it repositions the stores closer to the Pak'n'Save value brand of local rival Foodstuffs, which has 60 per cent of the market.

"We experienced another quarter of pleasing sales growth and continued to build momentum by growing market share, customer numbers, items sold and basket size," said Woolworths New Zealand managing director Dave Chambers, in the statement.

Sales from consumer electronics in New Zealand, under the Dick Smith brand that Woolworths is putting up for sale, rose 2.7 per cent to $77 million,

New Zealand supermarkets account for about 7.7 per cent of Woolworths' total revenue, which rose 3.8 per cent to A$14 billion in the latest quarter, the company reported today. The bulk of that came from supermarkets in Australia, which posted a 3.7 per cent gain in sales to A$12.2 billion.

"This has been achieved in a continuing tight consumer market," said chief executive Grant O'Brien.

"Whilst the quarter saw an improving sales trend, we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates."

Shares of Woolworths fell 0.7 per cent to A$25.65 on the ASX today and have gained about 2.2 per cent this year. The stock is rated 'outperform' based on the consensus in a Reuters poll, with a price target of A$27.31.